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Reinventing the Workplace:
How Business and Employees Can Both Win:  Advantages
and Disadvantages of Employee Involvement

by Dr. David I. Levine




Possible Advantage of Participation
Possible Disadvantage of Participation
Footnotes
Reinventing The American Workplace Home



Advantages and Disadvantages of Employee Involvement

The following summarizes many theories of how employee involvement can raise productivity, satisfaction, and product quality, stressing the reasons that employee participation may not always work.

Possible Advantage of Participation

  • Participation may result in better decisions. Workers often have information that higher management lacks. Furthermore, participation permits a variety of different views to be aired.
  • People are more likely to implement decisions they have made themselves.(2) They know better what is expected of them, and helping make a decision commits one to it.(3) Participation may lower the disutility of effort, by providing intrinsic motivation.(4)
  • The process of participation may satisfy such nonpecuniary needs as creativity, achievement, and the desire for respect.
  • Participation may improve communication and cooperation; workers communicate with each other instead of requiring all communications to flow through management, thus saving management time.
  • Participative workers supervise themselves, thus reducing the need for managers and so cutting overhead labor costs. Participation teaches workers new skills and helps train and identify leaders.
  • Participation enhances people's sense of power and dignity, thus reducing the need to show power through fighting management and restricting production.
  • Participation increases loyalty and identification with the organization. If participation and rewards take place in a group setting, the group may pressure individuals to conform to decisions.(5)
  • When union and management leaders jointly participate to solve problems on a nonadversarial basis, the improved relationship may spill over to improve union
  • management relations.
  • Participation frequently results in the setting of goals. Goal setting is often an effective motivational technique, particularly when workers set their own goals.(7)


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Possible Disadvantage of Participation

  • Workers may be less informed than managers, and the premises upon which they make their decisions may be different. The rewards motivating workers to share their ideas may be larger than the value of the ideas themselves.(1)
  • Once becoming committed to a decision, employees may be reluctant to change it.
  • Not everyone has strong desires for creativity and achievement, or they satisfy these sufficiently off the job.
  • Participation is time consuming, and if decisions are made by groups, reaction to changing environments may be particularly slow.
  • Retraining of employees and managers can be expensive.
  • Once a precedent of participation is established, withdrawal of the right to participate becomes difficult.
  • Cohesive, participative groups may unite against management to restrict production and prevent change.
  • Sharing information with unions raises their bargaining power, so companies may lose.6 Cooperating with management may lower unions' legitimacy with members, so they may lose as well.
  • Goals workers set for themselves may be low.


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Footnotes

This draws on David I. Levine and George Strauss, "Employee Participation and Involvement," in Commission on Workforce Quality and Labor Market Efficiency, Investing in People: A Strategy to Address America's Workforce Crisis, background papers, vol. 2, paper 35b (Department of Labor, September 1989), pp. 1893 948.

1.  Michael C. Jensen and William H. Meckling, "Rights and Production Functions: An Application to LaborManaged Firms and Codetermination," Journal of Business, vol. 52 (October 1979), pp. 469506.

2.  L. W. Porter, Edward E. Lawler III, and J. Richard Hackman, Behavior in Organizations (McGrawHill, 1975).

3.  Barry Staw and Jerry Ross, "Commitment to a Policy Decision: A Multitheoretical Perspective," Administrative Science Quarterly, vol. 23 (1978), pp. 4064.

4.  Barry Staw, "Intrinsic and Extrinsic Motivation," in Harold J. Leavitt and others, eds., Readings in Managerial Psychology, 3d ed. (University of Chicago Press, 1980).

5.  George Strauss, "Managerial Practices," in J. Richard Hackman and J. Lloyd Suttle, eds., Improving Life at Work: Behavioral Science Approaches to Organizational Change (Santa Monica, Calif.: Goodyear Publishing, 1977), pp. 297363.

6.  Morris M. Kleiner and Marvin L. Bouillon, "Information Sharing of Sensitive Business Data with Employees," Industrial Relations, vol. 30 (Fall 1991), pp. 48091.

7.  Gary P. Latham, Miriam Erez, and Edwin A. Locke, "Resolving Scientific Disputes by the Joint Design of Crucial Experiments by the Antagonists: Application to the ErezLatham Dispute Regarding Participation in Goal Setting," Journal of Applied Psychology, vol. 73 (November 1988), pp. 753
  • 72.

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